Is praise for XSLT and for the generous specialists on this list on
topic? I hope so...

This mental update to the unlimited power of XSLT 2.0 reminds me, how
difficult/important it is to overcome existing thought patterns. I,
too, would have assumed that the process of grouping divides the
selected sequence into disjunct groups. But no, it does a lot more and
this is described very precisely in the Programmers Reference --
which I know, because I immediately reread the description of xsl:for-
each-group.

How about:

<xsl:for-each-group select="//item" group-by="tokenize(meta,',')">
 <xsl:sort select="current-grouping-key()"/>
 <h2><xsl:value-of select="current-grouping-key()"/>:</h2>
 <ul>
   <xsl:for-each select="current-group()">
     <xsl:sort select="name"/>
                  <li>...

Grouping does not require that there be a single grouping key for
each item grouped, and an item may appear in more than one group.